Kochi: You might be searching for an under-construction property that costs Rs one crore. If the builder announces certain relaxations in equated monthly instalments (EMI) you would definitely be tempted to give it a try.
Advertisements like pay 25% now and pay the remaining 75% by the date of completion will grab your attention as the brochure also states that in case you avail a loan for the 75%, the builder will absorb the pre-EMI interest up to 9.5% till the date of completion.
You might view this as an opportunity to save money and consider it flexible as it allows you to begin repayment after getting possession of your new home.
"In such cases the buyer stands to benefit from the deal. Though the builder has not brought down the value of the project, the buyer will get gains in terms of interest," said architect S Gopakumar. He said builders make such desperate moves when they are keen to sell out apartments.
When there is a pre-EMI option, the buyer will have to pay only the interest on the loan that will be disbursed at each stage of construction. The real EMI payment will start after the buyer gets possession of the house.
But, representatives of Credai warn that 'there is no free lunch' and the buyers should check out the details before taking such deals. They say that market conditions would sometimes force builders to reduce the price. Credai said that reputed builders would generally hesitate to slash prices. "There are some hidden practices. They might opt to hike the price and provide offers or stick to the existing price and announce discounts," said a Credai representative.
Consumer forum president Cherian Kuriakose said that the customer should thoroughly go through the agreement between the builder and their bankers before going for a loan as it could provide more insights into offers and discounts. "In case the builder fails to complete the project on time, the buyer will end up paying interest for a longer period. Though the repayment begins only after getting possession you will later realize that whatever amount you have paid so far would not have helped in reducing your principal amount or the tenure of payment," he said.
The forum also wanted customer to get a better understanding of tax benefits and issuance of interest certificates while opting for a pre-EMI in under construction stage.
Apart from the relaxations in EMI, builders also have come up with offers like undertaking interior decoration works. A city-based builder said that for the buyers of a 3BHK in one of their projects in Fort Kochi they have offered to undertake interior works worth Rs 5 lakh and for 2BHK they would undertake works worth Rs 3 lakh. "The builders does not want to publicise discounts. If you go for a negotiation instead of sticking to the offer they might be willing to sell the apartment at a reduced rate," said the Credai representative.
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Advertisements like pay 25% now and pay the remaining 75% by the date of completion will grab your attention as the brochure also states that in case you avail a loan for the 75%, the builder will absorb the pre-EMI interest up to 9.5% till the date of completion.
You might view this as an opportunity to save money and consider it flexible as it allows you to begin repayment after getting possession of your new home.
"In such cases the buyer stands to benefit from the deal. Though the builder has not brought down the value of the project, the buyer will get gains in terms of interest," said architect S Gopakumar. He said builders make such desperate moves when they are keen to sell out apartments.
When there is a pre-EMI option, the buyer will have to pay only the interest on the loan that will be disbursed at each stage of construction. The real EMI payment will start after the buyer gets possession of the house.
But, representatives of Credai warn that 'there is no free lunch' and the buyers should check out the details before taking such deals. They say that market conditions would sometimes force builders to reduce the price. Credai said that reputed builders would generally hesitate to slash prices. "There are some hidden practices. They might opt to hike the price and provide offers or stick to the existing price and announce discounts," said a Credai representative.
Consumer forum president Cherian Kuriakose said that the customer should thoroughly go through the agreement between the builder and their bankers before going for a loan as it could provide more insights into offers and discounts. "In case the builder fails to complete the project on time, the buyer will end up paying interest for a longer period. Though the repayment begins only after getting possession you will later realize that whatever amount you have paid so far would not have helped in reducing your principal amount or the tenure of payment," he said.
The forum also wanted customer to get a better understanding of tax benefits and issuance of interest certificates while opting for a pre-EMI in under construction stage.
Apart from the relaxations in EMI, builders also have come up with offers like undertaking interior decoration works. A city-based builder said that for the buyers of a 3BHK in one of their projects in Fort Kochi they have offered to undertake interior works worth Rs 5 lakh and for 2BHK they would undertake works worth Rs 3 lakh. "The builders does not want to publicise discounts. If you go for a negotiation instead of sticking to the offer they might be willing to sell the apartment at a reduced rate," said the Credai representative.
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